Public schools will not be required to send as much CARES Act funding to private schools after a federal judge struck down a U.S. Department of Education rule.

The CARES Act included a provision requiring school districts receiving these funds to provide equitable services to non-public schools in the same manner as provided under Title I of the ESEA. The funding calculation for equitable services to non-public schools has always been based on the number of low-income children attending those schools in each district. 

In a departure from this practice, the U.S. Department of Education issued an interim final rule in July providing that if school districts calculate equitable services funding based only on low-income students attending private schools in the district, then the school district can only use Title I funds in its Title I participating schools, rather than on all the students in the school district.

Alternatively, if a district wanted to use its Title I funds on all the students in the district, then the district must calculate the equitable services portion of funds based on total student enrollment in private schools, regardless of student need, thus diverting a greater share of funds to private schools. The rule’s requirements affected approximately 8 to 10 percent of the CARES Act's $13.2 billion for public schools. A new analysis of the CARES act from IDRA (Intercultural Development Research Association) showed that the rule would increase the funding that usually is diverted to private education in Texas by over $38.7 million.

Prior to publishing the interim final rule, U. S. Secretary of Education Betsy DeVos issued guidance directing school districts to determine how much CARES Act money to spend on services for private school students based on total enrollment in private schools, rather than on student poverty levels. 

However, now that the interim final rule has been struck down, TEA has advised school districts in its CARES Act Equitable Services FAQ (9/10/20), that school districts that originally calculated funds for equitable services based on all students enrolled in private schools should recalculate based on low-income private school students that reside in participating attendance areas, and hold the extra funds from its original calculation in reserve until any future appeal by USDE is resolved. Additionally, school districts are no longer restricted to only providing ESSER services to Title I-served campuses.

These events should free up more funds for school districts to use for students attending public schools within the district.